Net neutrality overturned: Will Netflix have to pay your provider to stream your movies?

Update: Comcast will continue to abide by the FCC's Open Internet Rules despite the court's decision. See below for details.

A three-judge federal appeals court on Tuesday in Washington D.C. overturned "net neutrality" rules implemented by the Federal Communications Commission (FCC). Those rules heretofore prevented internet access providers like Comcast and Verizon from favoring some types of information over another across their networks, according to GigaOM:

The court's ruling is a game-changer because it upsets the FCC's current practice of requiring broadband internet providers to act akin to "common carriers." In plain English, this means that they have had to behave in a similar way to phone companies and not give special preference to one type of call (or traffic) over another, even though the FCC's authority to regulate the broadband providers was not clear cut.

Right now, the bits of data coming to your computer from don't have any higher or lower priority on your network than the data comprising a streaming movie from Netflix, or data from the New York Times web site. That's what net neutrality is, in a nutshell. That's what the FCC rules were there to enforce. The court overturned those rules.

This paves the way for Internet access providers to prioritize big bandwidth users by expecting them to pay to play - big companies can fork over money to make sure their data is prioritized over everyone else's. Unfortunately, that could be a real innovation killer, because it also presents the possibility that smaller businesses without the ability to pay for that prioritization won't be able to compete.

Net neutrality isn't a new issue - it's been openly discussed for the last decade and a half, as public internet access has grown from a curiosity to an essential form of communication. But public policy on the issue had been lacking on it until late 2010, when the FCC issued a rule called Preserving the Open Internet. It's points II and III of that document - "No blocking" and "No unreasonable discrimination" - that the judges said don't pass muster.

If Congress writes new laws to give the FCC additional authority in this matter, this could change. The appellate panel left that possibility open. It's also entirely likely that now the case has run through the appeals court that it'll head upstairs to the Supreme Court.

Update: Comcast will stay the course, according to a statement. Sena Fitzmaurice, Comcast's vice president of government communications, told iMore: "Comcast will continue to be under the FCCs Open Internet Rules as agreed to in the NBCUniversal transaction order."

Update 2: David L. Cohen, Comcast executive vice president, offered a longer statement later in the day: “Comcast has consistently supported the Commission’s Open Internet Order as an appropriate balance of protection of consumer interests while not interfering with companies’ network management and engineering decisions. As a result, we agreed in the NBCUniversal Transaction Order to abide by the Open Internet rules for seven years even if the rules were modified by the courts. We remain comfortable with that commitment because we have not – and will not – block our customers’ ability to access lawful Internet content, applications, or services. Comcast’s customers want an open and vibrant Internet, and we are absolutely committed to deliver that experience. We are committed to work with Chairman Wheeler and the Commission to play a constructive role in finding an appropriate regulatory balance going forward that will continue to allow the Internet to flourish. Given the DC Circuit Court of Appeals holding that the FCC has jurisdiction in the broadband arena to preserve and facilitate the innovation that has driven the Internet, we are optimistic that the Commission can accomplish this result while avoiding inappropriate common carrier regulation.”